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Old 08-14-2012, 09:33 PM
 
577 posts, read 870,201 times
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Quote:
Originally Posted by Willy702 View Post
It has very little impact on home prices right now, its the perfect time to get rid of it. When interest rates were 7% the deduction kicked in on around $200k homes. Now its over $350k and of course home prices are mostly lower. This is a populist relic from the 80s when people had 20% rates and it seemed like home buying would collapse. It meant something significant back then.

Yet another policy move almost everyone who pays any attention would agree to, but we have the anti-tax people in power and alll their "pledges" not to raise taxes a dime to deal with. It wont ever get done until someone stands up to them.
I don't think this is the blockade for this one. They could easily appease the anti tax crowd by lowering the overall tax rate to match the money gained from eliminating the deduction. The big road block is this deduction is a sacred cow for most homeowners regardless of whether or not they actually benefit from it. There are a lot of people that are insistent that this is the only way homes are affordable for the middle class (even though it benefits those with the smallest loans the least), or this is the only thing saving housing, or this is the only way to increase home ownership for stable neighborhoods, etc. Just mention eliminating the deduction and watch the crowd that is for raising taxes in a general sense suddenly backpedal.
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Old 08-14-2012, 11:59 PM
 
Location: The North
4,977 posts, read 8,709,023 times
Reputation: 3860
Quote:
Originally Posted by msdmoney View Post
I don't think this is the blockade for this one. They could easily appease the anti tax crowd by lowering the overall tax rate to match the money gained from eliminating the deduction. The big road block is this deduction is a sacred cow for most homeowners regardless of whether or not they actually benefit from it. There are a lot of people that are insistent that this is the only way homes are affordable for the middle class (even though it benefits those with the smallest loans the least), or this is the only thing saving housing, or this is the only way to increase home ownership for stable neighborhoods, etc. Just mention eliminating the deduction and watch the crowd that is for raising taxes in a general sense suddenly backpedal.
Take a look at the pledges they have signed. They say nothing about being revenue neutral. They don't want tax breaks to go away period. To take away a break is to increase a rate in the Grover Norquist mindset. As inflexible and patently ridiculous as this can be, nearly half the Congress has agreed to this just to get elected.
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Old 08-16-2012, 04:08 PM
 
Location: Central Texas
13,720 posts, read 24,682,338 times
Reputation: 9179
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Originally Posted by bale002 View Post
Flat tax on gross income, no exemptions, deductions or credits, one-half page tax return, no other forms, all IRS efforts focused on full and accurate reporting of gross income.

... unicorns and candy canes ...


The income tax code has much less to do with government revenue than it has to do with influencing people's behavioir and putting everyone at legal risk. And there's a reason for it.

At any rate, highly unlikely that mortgage interest deduction will be scrapped.

Five million six-hundred thousand words and counting, just like the national debt ...

Good Luck!
Exactly. The way to get rid of the mortgage deduction is to phase it out over ten years. That avoids a gigantic shock to the system. People have time to refinance or otherwise change how they pay for their home.

The feds need to stop trying to get us to buy homes, have children, give to charity, or otherwise distort the true cost of the goods and services we use. Stop allowing deductions for state and local taxes.

All rates, whether flat or slightly progressive, should drop accordingly. Fraud will drop and collection rates will increase.
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